CANADA STOCKS-Toronto flat as financials, commodities offset

4 Min Read

* TSX ekes out gain; reverses 3-day streak in the red

* Financials rebound on optimism over U.S. home sales data (Adds details, quote)

By Jennifer Kwan

TORONTO, Feb 3 (Reuters) - Toronto’s main stock index eked out a small gain on Tuesday, ending a three-session streak in negative territory, as a rise in financials on hopes generated by U.S. home sales data offset commodity stock weakness.

But it was a largely directionless day that saw the index trade in a 123-point range from trough to peak.

About an hour before the session ended, the big financial services sector gained momentum, tracking optimism in the U.S. over a surprise jump in December pending home sales.

A report there showed buyers were lured back into the market by lower prices and mortgage rates. [ID:nN03524582] The sector finished up 0.7 percent.

“The home sales is a very important number because the thing is that’s sort of where the problem really originated,” said Robert A. Floyd, president R.A. Floyd Capital Management Inc.

“If we’re starting to see a little bit of strength there it’s a little encouraging because that’s the one area where we really have to see a turnaround occur for this marketplace to get better.”

The S&P/TSX composite index .GSPTSE closed up 3.80 points, or 0.04 percent, at 8,628.63, with four of its 10 main groups higher. The pop into positive territory came after 4 p.m. (2100 GMT). Earlier, the index fell nearly 1 percent.

Heavily-weighted names on the upside included Royal Bank of Canada (RY.TO), up 2 percent at C$30.85, and Bank of Nova Scotia (BNS.TO), which climbed 1.3 percent at C$30.19.

Floyd said the flat trading day suggests the market may also be waiting to digest more corporate earnings results before making any big moves.

As well, there is a lack of direction due to a “great deal of uncertainty out there,” said Ian Nakamoto, director of research at MacDougall, MacDougall & MacTier.

“There’s not enough conviction to carry the index higher,” he said.

Among individual stocks, heavily-weighted TransCanada Corp (TRP.TO) dropped 2.3 percent to C$32.62, as the country’s biggest power and pipeline company reported a fall in fourth-quarter profit. [ID:nN03329679]

Mega Brands Inc MB.TO, the top percent gainer, more than doubled its value from Monday’s close of 39 Canadian cents to finish at C$1.10. The Canadian toymaker said it signed a global licensing agreement with Microsoft Game Studios (MSFT.O) to make construction toys for its Halo Wars game. [ID:nN03367783]